Military expenditure and geostrategic dilemmas in Central-Eastern Europe

A recent publishing made by the Stockholm International Peace Research Institute (SIPRI) sheds light on the world military expenditure during the past year. The report highlights two opposite trends (Table 1): while there has been a significant increase in military expenditure in Central Europe (which rose by 12% between 2016 and 2017), Eastern Europe experienced a substantial fall (down by 18% with respect to the same timespan). However over the decade 2008-17 military spending saw a huge increase both in Central Europe (up by 20%) and in Eastern Europe (up by 33%) – opposite to the downward trend in Western Europe.


SIPRI table - europe

Table 1 – Military expenditure in Europe


If we break down these data, we can analyse the root causes of the two opposite trends. Perceptions of a greater threat by Russia (especially if we look at the Donbas region and in Crimea starting from 2014) have driven the spending increase in Central Europe: a region at the heart of Europe, which stretches between two giants, namely Germany and Russia. This increase has to be placed in a longer period and a greater picture of four consecutive years’ increase (from 2014 to 2017), while during the six previous years it had fallen consistently. An evolution that proves the role that the (perceived) Russian threat has for the military budget of these countries.

The biggest spender in 2017 in the region was definitely Poland, which accounted for 42% of the overall total. However, the largest relative increase was made by Romania which increased military spending by 50% (the highest rate of increase in the world between 2016 and 2017). This sharp rise was caused by the start of a policy implementation which will expand and modernise its military – inside of a ten-year long plan (2017-26). In the same region, two other countries saw a deep increase of the military budget: Latvia and Lithuania (both by 21%). The proximity with Russia does play, even in this case, a crucial role for the upward trend.

Shifting the focus to Eastern Europe, the main driver of the first annual decrease since 2008 was Russia – in 2017 it still accounted for 91% of the regional total, but with a 20% decline with respect to 2016. This is mainly due to the consequences of economic stagnation, an effect of the drop in oil revenues, combined Western sanctions, and greater military stretch in Eastern Ukraine and in the Middle East. Thus the government spending has been falling, even if the military expenditure share of 4.3% of the GDP (in 2017) was still larger than all other European countries. However, this fall granted the overtaking of the third place spender overall in the world by Saudi Arabia (Table 2). Focusing on Ukraine we can also see a decrease of 2% in real terms. This decrease follows the one experienced in 2016, quite opposite from the strong growth in 2014-15. The military burden over GDP has reduced in 2017, but this is due to improved economic conditions.


SIPRI table - world top 15

Table 2 – The 15 states with the highest military expenditure in 2017


These trends have to be contextualised with regard to the bigger geopolitical picture of Central-Eastern Europe. In early 2017, Poland and the Baltic states hosted the deployment of NATO’s “Enhanced Forward Presence”, i.e. allied forces’ boots on the ground. Still these forces do not represent sufficient defence coverage in case of a significant external attack (see Munich Security Report 2018). In any case the deployment of the troops makes an attack to the Eastern allies more costly in the immediate, even if they could not overcome a large-scale attack. However, even a marginal shift in the military capability and deployment can be enough to prevent conflicts in the short run. NATO still engages in a double strategy of dialogue and deterrence. Nevertheless, the gradual disintegration of arms control instruments and the increase of deployment of military capabilities of any kind could lead to a further worsening and aggravation of the security situation in Europe (MSR 2018). The biggest stumbling block remains the conflict in Eastern Ukraine, while problems emerge even in the string of land that goes from Belarus to Azerbaijan which represents a “buffer zone” between Russia on the one hand and NATO and the EU on the other.

By Fabio Seferi

Fabio holds a Master's Degree in International Relations and European Studies from the University of Florence, Italy. His Master's thesis focused on the role and influence of Russia, Turkey and China in the Western Balkans. He has been Programme Assistant Intern at the European Policy Centre, a Brussels-based think tank, and Ad-Hoc Research Assistant for The Global Initiative against Transnational Organized Crime. Fabio’s main research interests focus on conflicts, political violence, hybrid warfare, intelligence analysis and organised crime.

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